THE IMPACT OF PROPOSED CHANGES TO THE SECTION 21 EVICTION PROCESS ON LANDLORDS LEGAL EXPENSES INSURANCE PREMIUMS

Richard Finan, Director of Arc Legal Assistance, has been discussing the impact that elongating the tenancy eviction process would have on Landlords Legal Expenses Insurance (LEI) premiums where Rent Guarantee coverage is included.

Liberal Democrat peers have tabled changes to the Deregulation Bill at the House of Lords that would make it harder for landlords to evict tenants.

The move would affect Section 21 notices that give a tenant two months to leave the property after their contract has expired. At present, these cannot be defended; however, the proposed changes will permit a tenant to defend the case – elongating the eviction process.

Arc Legal’s Landlords LEI policy provides legal costs to evict a tenant, and in many instances Rent Guarantee cover is offered as an optional upgrade at the point of sale. The ability of tenants to contest a section 21 notice, effectively extending period of time that rent may be paid under the policy, would result in an increase in risk, potentially leading to higher policy premiums.

The proposed changes may also see tenants take advantage of the system, whilst good landlords are penalised.

Richard was speaking to Insurance Times. The full article can be found at www.insurancetimes.co.uk